Financial statement analysis is everybody’s business. Its importance cut across many disciplinesin both academia and industry. Showing a good understanding and interpreting financialstatement has therefore become relevant in the study of Business Finance.
Your task under this section is to analyze the financial statements of two selected firms and write a report on the performance of the firms to be presented to potential investors using the guidelines below.
1. Download the file Financial statement.xls as attached to the additional files on the UPSA Virtual Platform. Alternatively, follow the link provided below to assess financial statement of two firms: Armcor PLC and Sealed Air PLC listed on the S&P 500. The financial statements comprise of separate Balance Sheet and Income Statement for the two companies.
https://drive.google.com/open?id=16VDq53Q3vgkubKUcO7JyI96Vxsw22Vul
2. Visit Yahoo! Finance at http://finance.yahoo.com/ to read more about the two companies
Required
A. Write a short description of Armcor PLC main line of business only. Be sure to include the following details
i. The stock’s most recent price, trade date, and trade time.
A description of the highest and lowest prices the stock has reached in the past year.
The company’s market capitalization, price-earnings (P/E) ratio, and its price-to book ratio. Describe what each ratio means.

B. Use the balance sheet and income statement data you gathered to complete this section for both Armcor PLC and Sealed Air PLC.

i. Complete a simple financial statement analysis of the two companies (calculating and discussing at least two ratios under each Liquidity, Profitability, Leverage,

Market/Investment and Efficiency ratios). 

ii. Analyze the results of the two companies. Your discussion should focus on the changes in relation to the ratios computed in 2(a) above.

The table below suggest possible financial ratios that can be calculated. Students can select two ratios under each heading.

LIQUIDITY RATIO Armcor PLC Sealed Air PLC

Cash Ratio

Current Ratio

Acid T est Ratio

LEVERAGE RATIO

Total Debt ratio

Debt/Equity Ratio

Debt/Equity Ratio (approximated)

PROFITABILITY

Gross profit margin

Net Profit Margin

Operating Income margin

EFFICIENCY RATIO

Inventory turnover Period

Trade Receivable period

Trade Payable Period

MARKET/INVESTMENT RATIO

EPS

P/E ratio

Interest cover ratio

Dividend Cover ratio

Transcribed Image Text:

Below are the statements of financial position of three companies as at 31 December 2017. Bauble Jewel Gem Co Co Co GHS'000 GHS'000 GHS'000 Non-current assets Property, plant and equipment Investments in group companies 720 60 75 185 100 905 160 75 Current assets 175 90 85 1,080 250 160 Equity Share capital – GHC1 ordinary shares 400 100 50 Retained earnings 560 90 70 960 190 115 Current liabilities 120 60 40 1,080 250 160 You are also given the following information: Below are the statements of financial position of three companies as at 31 December 2017. Bauble Jewel Gem Co Co Co GHS'000 GHS'000 GHS'000 Non-current assets Property, plant and equipment Investments in group companies 720 60 75 185 100 905 160 75 Current assets 175 90 85 1,080 250 160 Equity Share capital – GHC1 ordinary shares 400 100 50 Retained earnings 560 90 70 960 190 115 Current liabilities 120 60 40 1,080 250 160 You are also given the following information:

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